California homeowners are facing another financial gut punch as the state's last-resort insurance program, the California FAIR Plan, seeks to raise premiums by nearly 36%. The proposed increase highlights a deepening crisis where extreme weather and rising wildfire risks are making basic insurance coverage harder to afford.

What's happening?

The California FAIR Plan, a state-created but privately funded insurer, has asked regulators for a 35.8% average rate hike on homeowner policies, according to a filing, via the Modesto Bee. The plan, which serves as a safety net for homeowners who can't get coverage elsewhere, has seen its policy count more than double in just three years.

Spokesperson Hilary McLean said the increase is driven mainly by wildfire risk, a growing threat as hotter, drier conditions fuel larger, faster-spreading blazes. The proposal is now looking at a state review. While the final approved rate could be lower, advocates say even a partial increase would hit struggling homeowners hard.

"There's no question a rate hike that size would be a huge blow to all the homeowners already paying a lot for too little coverage at the FAIR Plan," said Carmen Balber, executive director of the advocacy group Consumer Watchdog, per the Modesto Bee.

Why is this concerning?

This is an example of the mounting challenges across the U.S. as climate-fueled disasters upend the economics of insurance. Major insurers like State Farm and Allstate have already pulled back from California, citing wildfire losses and the growing costs of rebuilding. That's left hundreds of thousands of families reliant on FAIR, which was only intended to be an emergency backstop, not a long-term coverage solution.

For homeowners, skyrocketing premiums can mean choosing between essential coverage and financial stability. And with extreme heat and fire seasons worsening each year due to human-generated pollution, experts warn these rate hikes may become the new normal unless deeper changes are made.

What's being done about it?

The California Department of Insurance has pledged to carefully review the request "to make sure consumers do not pay more than is required," according to department spokesperson Michael Soller, per the Modesto Bee. The FAIR Plan says it is working with the state to ensure its rates reflect "current risk portfolios."

Long-term, California can benefit from resilience strategies like vegetation management programs, community fire-hardening grants, and home retrofitting incentives to reduce property losses and stabilize insurance markets. Experts say homeowners can help by clearing space around properties and investing in fire-resistant materials.

Another important step is supporting policies that transition away from the dirty energy sources contributing to rising temperatures and extreme weather. Ultimately, through changes like embracing electric vehicles, using less plastic, and conserving our ecosystems, we can help stem the factors contributing to the climate crisis.

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